Embracing Opportunity and Bracing for the Future: Renewal Discourse and Inoculation

Longitudinal Crises

As Reber et al. (2021) note, scholar and practitioner communities have come together in recent years to discuss the idea of corporate sticky crises, or those that present extreme difficulty for organizations to move beyond or address. These crises extend past the more traditionally studied one-time events resulting from a known cause and have an elevated level of challenge and complexity. When identifying the root of crises problematic enough to be considered sticky, Coombs et al. (2021) point to data breaches, scansis (i.e., an integrated scandal and crisis), industry-wide crises, public health crises such as COVID-19, and longitudinal crises, or those that extend over a prolonged time period (i.e., months or years).

Despite the ability to group sticky crises into types, offering guidance on how to navigate these crises is less straightforward (see Jin et al., 2021). As scholars and practitioners have noted, the issue with managing sticky crises is that, in addition to the uncertainty and alarm present in all crises, these larger scale crises bear unique exigencies and often involve multiple stakeholder, corporate, and government agencies. As Coombs et al. (2021) note, “After decades of practice and research, we have a solid knowledge base for how to utilize communication during ‘typical’ crises … however sticky crises take managers outside of the normal crisis communication knowledge base by creating unique demands” (p. 63). Furthermore, the authors note, previously established best practices are “moot” (p. 80), and an appropriate response requires an understanding of key concerns in sticky crisis and how to best communicate around those concerns.

In the present study I acknowledge the distinct need for understanding appropriate communicative responses to corporate sticky crises and, more specifically, longitudinal crises (see Coombs et al., 2021). However, despite a myriad of unique factors specific to each individual crisis, all longitudinal crises by their very definition have one shared element: a mid-crisis period. Given this element of certainty in a prolonged environment of uncertainty, I leverage crisis midpoint as a path to developing communicative guidance in longitudinal sticky crisis. As seen in the development of “typical” crisis response strategies (see Coombs, 2023), this work analyzes communication identifiable as mid-crisis to assess patterns. Furthermore, based on the preliminary work of Compton’s (2016) image prepare I suggest a simultaneous forward-looking optimistic (i.e., renewal discourse) and forward-looking defensive (i.e., inoculation messaging) strategy as a plausible mid-crisis approach.

Renewal Discourse

Prior to the development of renewal discourse, crisis communication strategies such as corporate apologia (Hearit, 2018), image repair (Benoit, 2015), and Situational Crisis Communication Theory (SCCT) (Coombs, 2023) largely focused on accusations directed at an organization and the most organization-friendly way to respond to those accusations. Yet, scholars noted that crises actually present an opportunity for growth that would otherwise not be available (Ulmer & Sellnow, 2020). If executed properly, they argued, stakeholders would see not only recovery from the crisis as possible but resulting positive change that could restore stakeholder goodwill even beyond pre-crisis levels.

A crisis response that adheres to the principles of renewal discourse bears four hallmarks (Ulmer & Sellnow, 2020). The first is organizational learning; though crisis details are not known in advance, their immediacy forces adaptation. As Wombacher et al. (2018) note, crises are often a result of a failure, but that failure can be seen by stakeholders as a part of an ongoing effort to learn and adapt to risks. As such, renewal discourse gives organizations the opportunity to showcase crisis-induced positive changes to stakeholders, especially if the change involves correcting or preventing a previous mistake.

The second distinction of renewal discourse is prospective vision. Following a crisis, organizations often focus on recent events in an attempt to assign responsibility (Ulmer & Sellnow, 2020). However, forward-looking messages are often the preeminent concern for stakeholders when trying to move past a crisis (Fuller et al., 2019). Optimism and development of a shared goal, therefore, are key aspects of prospective vision (Ulmer & Sellnow, 2020). Organizational leaders can use stakeholders’ raised level of awareness in crisis to help them not only to work through the crisis, but to view all crises as catalysts for growth alongside the organization (Wombacher et al., 2018).

Effective organizational rhetoric is the third facet of renewal discourse. Ulmer and Sellnow (2020) note that leaders should establish themselves as role models of perseverance by communicating in a way that is transparent and provides insight into organizational life and improvement efforts. Similarly, the final feature of an effective renewal effort, ethical communication, involves a focus on stakeholder rather than organizational impact and the use of provisional (i.e., response-oriented) rather than strategic (i.e., defense-oriented) communication. The opportunity to communicate ethically following crisis, therefore, hinges on organizations having a pre-existing positive relationship with stakeholders (Fuller et al., 2019). This type of relational history can not only offer organizations a base of social capital on which to draw during crises, but also provides organizations needed insight into stakeholder implications (Ulmer & Sellnow, 2020). Furthermore, this communication must come authentically from the formal leaders of the organization.

The success of a renewal discourse effort that utilizes the four facets to refocus stakeholder attention away from crisis blame and impact and toward post-crisis organizational improvement is well-documented (see Ulmer & Sellnow, 2020). However, this positive shift in stakeholder sentiment can be short-lived if the crisis is prolonged. Sticky crises, and longitudinal crises in particular, do not have a clear endpoint after which to begin renewal discourse efforts (Coombs et al., 2021). In its current form renewal discourse does not include a protective element but instead focuses on moving forward from a past issue. If stakeholders are exclusively focused on moving beyond a crisis while that crisis is ongoing, how can the leaders rely on renewal discourse to abate reputational damage? Given this complexity, integrating elements of inoculation theory can sustain the focus on future growth and organizational well-being even amidst prolonged crises. The integrated approach, therefore, can extend renewal discourse from a solely post-crisis strategy and offer potential utility in other phases, including mid and even pre-crisis.

Inoculation Theory

Messages using the principles of inoculation theory have been researched since the early 1960s (see Ivanov et al., 2020). The basic explanation for how the theory works is that message recipients receive a weakened dose of the content of a future persuasive message (hence the name “inoculation”), which generates a perception that the person’s held attitude could be threatened. Threat can be intrinsic (i.e., exposure to an alternate viewpoint signals that the attitude could be attacked) and/or extrinsic (i.e., often in the form of explicit forewarning that the attitude will be attacked) (Compton, 2021). Recognition of the attitude’s vulnerability motivates recipients to generate counterarguments in defense of their held position, thereby creating resistance to future persuasive attempts (Banas & Richards, 2017). Also included in a typical inoculation message are refutational preemption components, or statements that introduce an opposing argument and subsequently overwhelm the argument with support for the recipient’s originally held position, which is the position advocated in the inoculation message (Banas & Richards, 2017). Refutational preemption offers not only guided counterarguing practice, but also introduces various counter-attitudinal challenges that the person could encounter (Compton, 2020).

While the applied contexts of inoculation theory extend well beyond crisis communication (see Ivanov et al., 2020), message utility as a pre-crisis communication strategy has been consistently demonstrated. Operating on the idea that a preemptive inoculation message can insulate positive stakeholder attitudes from forthcoming attack in the form of a crisis event, scholars have demonstrated the efficacy of inoculation messages in several crisis contexts. These include insulating investor buy-and-hold attitudes prior to stock market volatility (Dillingham & Ivanov, 2017), protecting confidence in public agencies ahead of political violence (Ivanov et al., 2016), and preserving corporate reputation in the face of an accident or misdeed (see Ivanov et al., 2020).

Yet, Compton (2016) called for a synthesis of traditional post hoc crisis communication approaches (i.e., image repair) and inoculation theory, citing a shared goal of promoting positive organizational image. The author argued that, while traditional inoculation has been used in a linear fashion prior to an attack, and crisis communication strategies after an attack, future synthesis could be “a way to not only repair a challenge, post-hoc, but also to confer resistance to future challenges, preemptively” (p. 2). While Compton’s primary focus was a synthesis of message content, I embrace and extend that view to include message timing. Longitudinal crises bear the uncertainty not only of crisis details and attribution, like typical crises, but also of crisis duration (Reber et al., 2021).

Therefore, while citing mid-crisis communication as a distinct exigency in longitudinal crises, I answer Compton’s (2016) call to synthesize the content of a pre-crisis inoculation message designed to insulate attitudes and a post-hoc crisis response strategy by pairing inoculation elements with those of renewal discourse. Furthermore, this mid-crisis message timing and paired content bears practical import – an organization facing a crisis that is not over would not want to encourage stakeholders to look only to the future, which is how renewal discourse is traditionally applied (Ulmer & Sellnow, 2020). Since news of the crisis is the attack message when inoculation is utilized in the crisis context (see Dillingham & Ivanov, 2017), and refutational preemption introduces future challenges, by nature the inoculation message would recognize the risk of additional stakeholder impact when used alongside renewal discourse mid-crisis.

However, until recently Compton’s (2016) suggestion, termed image prepare, had a compelling roadblock. Inoculation theory is built on the idea of the recipient possessing a “favorable” attitude, or one in agreement with the stance advocated in the inoculation message (Compton, 2020). Research findings now suggest, though, that attitudes neutral or opposed to those promoted in the inoculation message can still benefit from inoculation messaging (Compton, 2020; Ivanov et al., 2022). Therefore, recipients of an inoculation message do not need to have only pro-organization attitudes to benefit from attitudinal protection. Dubbed therapeutic inoculation, or inoculation given to help rather than prevent attitude slippage, studies have shown that attitudinal shifts in the direction of the advocated position are not isolated to those already in agreement with the message content (Ivanov et al., 2022). Therapeutic inoculation not only boosts the overall practical utility of inoculation theory, but in the crisis communication realm suggests that stakeholders either critically evaluating the organizational response or still experiencing ongoing crisis effects could be positively influenced by inoculation messaging. This anti-organization or organization-neutral attitude could be due to crisis effects or a disagreement of how the organization initially handled the crisis.

Three additional features of inoculation theory enhance Compton’s (2016) suggestion of a synthesis with extant crisis management strategies. First, inoculation messages have shown the ability to protect against multiple persuasive attacks (Ivanov et al., 2018). Ivanov et al. (2018) found that the attitudinal protection generated by inoculation messaging could withstand up to three persuasive attacks spread over a 6-week period. In crises with an uncertain end point, the practical utility of an inoculation-based strategy increases if the protection can withstand more than one report of crisis. Or, alternately, this multiple attack capability is valuable if additional crisis details slowly come to the forefront and pro-organization attitudes are continually challenged with new pieces of information.

The second feature of inoculation theory that complements a pairing with renewal discourse are findings that suggest exposure to multiple inoculation messages can serve a boosting function (Parker et al., 2022). Inoculation theorists have long opined a booster message to extend generated resistance (Ivanov et al., 2018). While the overall resistance-generating capabilities of inoculation have consistently replicated over decades and contexts (see Ivanov et al., 2020), the waning resistance around the two and 4-week marks is a notable issue (Ivanov et al., 2018). However, a growing body of work suggests that a repeated inoculation message can prolong generated resistance (Parker et al., 2022). Therefore, in the current application, if the duration of a crisis is unknown, practitioners can utilize inoculation mid-crisis and also have the ability to boost the effect later in the crisis period.

Finally, findings that demonstrate inoculation’s ability to protect against closely related issues not explicitly covered in the inoculation message are noteworthy in the mid-crisis application (Ivanov et al., 2020). Crises generate new facts and organizational details and by default those cannot be known in advance. Study results have shown that participants are overall more resistant to attitude change even when faced with a counter-attitudinal attack containing content different than what was contained in their pre-challenge preparation (i.e., inoculation message) (Parker et al., 2022). Therefore, inoculation messages should insulate stakeholder perceptions even if the actual forthcoming crisis details differ from what stakeholders processed as part of the inoculation message.

To answer Compton’s (2016) call to use inoculation messaging in crisis more flexibly and in synthesis with crisis communication strategies, I posit the following research questions:

RQ1: Is renewal discourse (as a crisis communication strategy defined by the tenets of organizational learning, prospective vision, effective rhetoric, and ethical communication) evident in mid-crisis organizational communication?

RQ2: Is inoculation theory (as a risk management strategy defined by the message elements of threat and refutational preemption) evident in mid-crisis organizational communication?

Mid-Crisis Context

The 2008 financial crisis was a large-scale global meltdown that “affected nearly all organizations and businesses globally, including governments, and the public, and private sectors” (Jin et al., 2018, p. 575). Short-term effects of the crisis included destabilized banking and securities industries, widespread home foreclosures, high unemployment, and stock market turbulence (Farmer, 2012). Following a years-long complex layering of a housing price bubble, introduction of mortgage-backed financial instruments, excess risk taking, insufficient oversight, and increased corporate debt (NCCFECUS, 2011), the situation developed into “one of the longest and most significant economic crises that the world has ever seen” (Brem et al., 2020, p. 360). The acute crisis period began in December 2007 and ended in June 2009 (NCCFECUS, 2011).

From Friday, September 12 – Sunday, September 14, 2008, amid an economic freefall widely compared to the Great Depression leadup (see Craig et al., 2008; Farmer, 2012), the United States government convened an emergency weekend meeting for leaders of the “big five” Wall Street investment firms: Bear Stearns, Lehman Brothers, Merrill Lynch, Goldman Sachs, and Morgan Stanley. As a result, Bear Stearns was sold to JP Morgan Chase for pennies on the dollar in a deal both encouraged and funded by the U.S. government, Merrill Lynch was sold to Bank of America in a similar fashion, Lehman Brothers filed for bankruptcy – which at the time was the largest Chapter 11 on record – and the remaining two firms, Goldman Sachs and Morgan Stanley, received an infusion of government money, colloquially known as a bailout (Craig et al., 2008).

The Weekend Wall Street Died serves as not only as a bastion of the situation’s overall severity, but also an optical demonstration of the roots of the crisis (Craig et al., 2008). The failure of three long-standing American institutions – saddled by toxic debt of their own volition – caused overall stock markets to plummet (Farmer, 2012). While Goldman Sachs and Morgan Stanley technically survived the ordeal, the firms remained enmeshed in the controversy and financial damage created by collateralized debt obligations (NCCFECUS, 2011). The suffering of mainstream citizens brought on by Wall Street greed and excess was widely covered in the media and the government bailout of investment firms was highly controversial (Farmer, 2012). The firms exited The Weekend Wall Street Died under scrutiny from the government, media, and shareholders.

Material

As predicated by the Securities and Exchange Commission, an annual report was released in the first quarter of 2009 and a letter to shareholders began the larger financial document (NCCFECUS, 2011). This yearly communication is written by a company’s top executives as a rare leader-based commentary on the company’s function throughout the year. Since this piece of communication is highly anticipated in the investment arena (Farmer, 2012), the shareholder letters from both Goldman Sachs and Morgan Stanley in the next available period following the 2008 collapse represent an ideal venue for mid-crisis communication study. The annual letter was representative of not only mid-crisis communication, but also presented an opportunity for the companies to address the concerns and ongoing risk assumed by their stakeholders as the only two surviving firms in the enduring crisis (Craig et al., 2008; Farmer, 2012).

After a preliminary evaluation of both the Goldman Sachs and Morgan Stanley 2008 letters, the Goldman Sachs letter was retained for rhetorical analysis due to its more robust and lengthy nature and the sustained performance of Goldman Sachs since the crisis (see La Monica, 2022). The Goldman Sachs 2008 Letter to Shareholders was authored by then-Chairman and Chief Executive Officer Lloyd Blankfein and then-President and Chief Operating Officer Gary Cohn.

The letter contained approximately 3,300 words and was structured as follows: an introduction titled “Fellow Shareholders” that described current circumstances and the state of the organization in relation to the crisis, followed by a section titled “A History of Adaptation” that reviewed past financial crises and how the company navigated those, then three sections titled “Bank Holding Company”, “Capital Purchase Program”, and “The Deleveraging Cycle” that explained changes to corporate finance structure as a direct result of the 2008 crisis, followed by two sections titled “Diverse Global Franchise Businesses” and “Strengthening Our Balance Sheet” that explained areas of the business well-poised to exit the crisis. The final sections of the letter were titled “The Lessons from 2008”, followed by “The Strength of Our Culture”, then “10,000 Women” which detailed the company’s key philanthropic efforts, and a concluding section titled “Looking Ahead”. The analysis of the letter is grouped by theoretical elements in the proceeding sections.

Inoculation: Threat

As previously discussed, the inoculation process begins with threat to a person’s existing attitudes, beliefs, or opinions (see Compton, 2021). Inoculative threat can be either extrinsic (i.e., explicit forewarning that attitudes will be assailed) or intrinsic (i.e., an introduction to or raised awareness of alternate viewpoints) that motivates the recipient to defend existing beliefs via counterarguing. Since retaining positive stakeholder sentiment amid prolonged crisis is the focus of the current study, extrinsic threat is conceptualized as a straightforward reference to individual investor panic or fear, or negative repercussions at the organizational level. Intrinsic threat, on the other hand, is conceptualized as a discussion of the severity and heightened intensity of the present crisis at the macro or overall level, especially as compared with previous large-scale financial crises.

Similar to how inoculation messages begin with elements designed to elicit threat (see Compton, 2021; Ivanov et al., 2020), Goldman Sachs uses the first four paragraphs of the stakeholder letter to acknowledge both the seriousness of the overall crisis (i.e., intrinsic threat) and the threat of the crisis specifically to the company’s wellbeing (i.e., extrinsic threat). The letter begins:

When we wrote to you last, a relatively healthy market environment in the first half of 2007 had given way to a much more challenging one, marked by significant volatility for the remainder of the year. Since that time, global financial markets have been buffeted by a series of extraordinary and tumultuous events. Most acutely this past fall, a global contagion of fear and panic choked off the arteries of finance, compounding a broader deterioration of the global economy. Global equity markets were down anywhere from 30% to 60% in 2008. Credit markets became virtually frozen. Several major financial institutions were either stabilized by their governments, the private sector filed for bankruptcy. Hundreds of thousands of people lost their jobs, over $1 trillion in credit-related losses were recorded and nearly $30 trillion in market value was wiped out in a matter of months. (p. 1)

In the proceeding paragraphs, the company refers to the cyclical nature of financial markets but notes that “this time, the drivers and the consequences are broader in scope and much more intense in effect” and that “recent markets have tested our firm like few other times in our 140-year history” (p. 1). Then, the company illuminates threats of the crisis to the company’s wellbeing specifically, noting a 52% decrease in net revenues and an 80% decrease in net earnings. While the overwhelming majority of extrinsic and intrinsic threat elements occur in the opening section of the letter, Goldman Sachs includes both elements in their final comments to stakeholders in the “Looking Ahead” section by noting that, “As long as human emotions influence decision making…this won’t be the last financial crisis with which the world will have to contend” and “the year ahead will bring with it a rapidly shifting and demanding environment” (p. 4).

Inoculation: Refutational Preemption

In an inoculation message, refutational preemption is designed to provide both content in support of the person’s originally held viewpoint and also offer an example of the type of counterarguing that, when generated internally and/or externally (see Ivanov et al., 2018), leads to generated resistance (Compton, 2020). The goals of refutational preemption are achieved by introducing an oppositional viewpoint and then overwhelming the contradictory material with evidence is support of the initially held view (i.e., the position advocated by the inoculation message) (Compton, 2020). In the current context, therefore, refutational preemption message components are definend as the description of a crisis or market demand-induced change previously faced by the company immediately followed by a description of how the company addressed the challenge in a way beneficial to stakeholders.

In a section titled “A History of Adaptation”, the company notes that amid the current challenging environment “many of the most important opportunities – and successes – in Goldman Sachs’ history came about during times of stress” (p. 1). The letter goes on to pinpoint four specific financial crises: the Asian market crisis of 1997, the Long-Term Capital Management hedge fund collapse of 1998, the tech bubble burst of 2000, and the Enron failure of 2001. Immediately after referencing each of the four specific crises, the authors explain how the company addressed that challenge by adjusting a portion of their financial holdings or entering a new market. Following these detailed descriptions, the letter states “… we have proven our ability to adapt our own structure, time and again, to meet rapidly shifting market conditions. In the last two decades, we have taken dramatic steps to transform ourselves … in the face of formidable circumstances” (p. 1).

Following the review of previous financial crises and how the organization overcame those, the letter details four past structural changes resulting from escalating market pressures (though not necessarily crises). These include the move from an investment-only firm to a comprehensive financial services provider and expansion outside the United States to meet global business demands. At the conclusion of the section, the authors offer a summary of their ability to handle unplanned change noting, “In every instance, questions about our strategy were raised, but our franchise and culture emerged stronger, primarily because we never lost sight of … responding to structural market developments” (p. 1).

Renewal Discourse: Organizational Learning

As a key hallmark of renewal discourse, organizational learning offers a way for organizations to illuminate the opportunities for growth inherent in crisis and explain how adjustments have been made based on the lessons learned (Lambiase & English, 2021). Given this study’s focus on crisis midpoint, therefore, instances of organizational learning are descriptions of unplanned change directly manifesting from the 2008 financial crisis.

Following the aforementioned acknowledgement of past financial crises and how the company handled those in the “A History of Adaptation section, the next four sections of the letter focus on adjustments brought on by the 2008 financial crisis. The authors denote key changes and explain how and how those changes will help the company exit the crisis. For example, the company explains the transition to a bank holding company as “continuing this track record of responsiveness” and offers that the transition will “allow Goldman Sachs to address market perceptions that placed a premium on the value of oversight” (p. 1).

Similarly, the letter explains how the company responded with adjustments to key operational areas during the swift escalation of the crisis during the preceding year. When explaining the emphasis on risk management and how Goldman Sachs had deleveraged in several areas to minimize loss, the authors note, “As market conditions deteriorated, we suffered losses in our loan portfolio. But, we monitored our exposure carefully and reduced it aggressively” (p. 2). Likewise, “While we experienced losses in our portfolio of commercial real estate assets, we have reduced our exposure to this sector over the past year” (p. 2). The letter also demonstrates organizational learning by explaining that selling assets was a critical part of managing the crisis, “Without the commitment to sell assets throughout the year, regardless of the fact that many market participants believed the prices were at distressed levels, our performance would have been materially weaker” (p. 3).

Renewal Discourse: Prospective Vision

Prospective vision is denoted by leader-led development of a shared goal and optimism about the future (Ulmer & Sellnow, 2020). After utilizing the introduction of the letter to largely address the severity of the current crisis and outcomes of past crises, midway through the letter (also midway through the discussion of 2008 crisis effects), the authors begin the transition to a more forward-looking approach. Words such as “creative ideas”, “uncompromised”, “confident”, and “opportunity” enter the dialogue. When concluding the discussion of the transition to a bank holding company, an action all but forced by the United States government (Craig et al., 2008), the authors note that alongside further funding diversification, “Other creative ideas, like the innovative way we were able to increase our lending capacity … are also under consideration” (p. 2).

In subsequent sections of the letter the authors note that, “In the midst of change, certain attributes of Goldman Sachs will remain uncompromised … our commitment to a balanced, well-diversified revenue stream across our global franchise” (p. 2). In addition, the leaders express they are “confident of our ability to outperform over the cycle” (p. 2). Other comments indicating a shared prospective vision are the commitment to “continue to leverage” a long-term positive track record and “robust” distribution relationships for continued growth, alongside an “interesting opportunity” to grow the private wealth management arm of the business, since prior to the crisis the focus had been on institutional investors (p. 2). The authors describe the intent of Goldman Sachs to “remain a market leader” and the company collectively as “well-positioned to deal with the challenges and opportunities that lie ahead” (p. 2).

In the section titled, “The Strength of Our Culture” the authors address the toll of the crisis on their employees and then explain that they proceeded with planned promotions amid the crisis as a choice to overlook short-term challenges in favor of long-term goal meeting. “In markets such as these, it would be easy to get locked into short-term thinking. Yet, the opposite happened” (p. 3). And “… during the most difficult days, our people across every division and region made time to think about the next generation of leadership…as in previous periods of difficulty, such times produce strong leaders” (p. 3).

Goldman Sachs closes the letter with strong optimism about the future, despite being embroiled in a major financial crisis. The authors note the company’s commitment to supporting future regulatory reform and also explain regarding investment opportunities in emerging markets, “we remain intent on having a strong presence in high-growth markets around the world … we continue to see important opportunities” (p. 4). Two of the last three paragraphs of the letter are positive forward-looking summations:

We have cultivated an extraordinary client franchise. We have broad and deep businesses around the globe. We have proved our ability to grow across a range of different environments. And, most importantly, we have recruited and retained generations of talented and dedicated people who thrive on adapting to the market, meeting challenges, and producing positive results for our clients. (p. 4)

Renewal Discourse: Effective Organizational Rhetoric

While the aforementioned elements of inoculation theory and renewal discourse are largely constrained to relative sections of the letter, effective organizational rhetoric is reflected throughout all portions of the artifact. Transparency into both leader perspective and organizational life are earmarks of effective organizational rhetoric (Ulmer & Sellnow, 2020). In the first section Blankfein and Cohn begin the tone of transparency with, “All of us, in one way or another, have been humbled by these events” (p. 1). The authors reference previous instances of the same rhetorical situation – the annual shareholder letter – and remind readers of their leadership philosophy, “As we have said in our previous letters, we have always seen it as our responsibility as leaders of Goldman Sachs to ensure that the firm is prepared to deal with adverse conditions” (p. 1). Blankfein and Cohn continue the narrative of leadership insight and then transition to the current letter by offering, “In this year’s letter, we would like to address some of the implications of recent events for Goldman Sachs and for our industry. We will also discuss how [business elements] position us favorably going forward” (p. 1).

In the midpoint of the letter, Blankfein and Cohn address three highly controversial corporate actions that involved both government intervention and wide, mostly negative, media coverage (Craig et al., 2008). When communicating with stakeholders about those sensitive issues the authors embody first-person language and transparency about the company’s actions. When referencing the transition to a bank holding company the authors explain, “In our decision, we saw nothing about becoming a BHC that would fundamentally detract from our core mission” (p. 2) and that going forward “we will further diversify our funding base” (p. 3).

Possibly the most delicate issue addressed in the letter was Goldman Sachs’ acceptance of $10 billion from the U.S. Treasury’s TARP (Troubled Assets Relief Program) Capital Purchase Program, colloquially known as a government bailout (Craig et al., 2008). Continuing with the theme of effective organizational rhetoric Blankfein and Cohn note that “We take our responsibility as a recipient of TARP capital very seriously …” (p. 2) and express a firm commitment to repay the debt “We appreciate that the TARP funds were never intended to be permanent capital. When conditions allow … we look forward to paying back the U.S. government’s investment so that money can be used elsewhere to support our economy” (p. 2).

In the subsequent section the authors review various areas of financial risk in the company’s holdings related to the U.S. housing market (i.e., a key driver in the 2008 financial crisis (see NCCFECUS, 2011)) and explain how either the organization does not have risk exposure in that area or what actions are being taken to manage the risk. They offer, “We believe that the housing-led downturn has at least five distinct elements” (p. 3). For each, they provide transparency about the company’s situation: individual mortgage “we outperformed … because of our reluctance to enter” and credit markets “… we had a large number of leveraged loans. As market conditions deteriorated, we suffered losses in our loan portfolio. But, we monitored … carefully and reduced it aggressively” (p. 3). Then, global equity “we were naturally exposed to significant market swings”, commercial real estate “we experienced losses in our portfolio … we have reduced our exposure” and consumer credit “no direct material exposure” (p. 3).

As the letter transitions to a more forward-looking approach in the “Diverse Global Franchise Businesses” section, Blankfein and Cohn offer that “In the midst of change, certain attributes of Goldman Sachs will remain uncompromised” (p. 2) and go on to detail key strengths of the company and how those have formed corporate identity. The authors open “The Lessons from 2008” section by openly explaining, “Our firm certainly didn’t get everything right and there are some decisions we would prefer to take back …” (p. 3) and go on to offer insight into key decisions both leading up to and during the crisis period. They explain their day-to-day leadership and navigation of the crisis in the “The Strength of Our Culture” section by noting, “Over the course of the year, both of us made it a point to spend more time walking the floors” and “We have never been prouder of this team” (p. 3). Blankfein and Cohn provide their overall perspective on the culture of the firm by summarizing, “Moments like these test a firm’s culture. But an ethos of teamwork, integrity, excellence and partnership continues to be the lifeblood of Goldman Sachs” (p. 4).

Renewal Discourse: Ethical Communication

Ethical communication as part of a renewal discourse effort is marked by reference to positive stakeholder relationships that existed before the crisis in addition to a focus on stakeholder implications rather negative impact to the organization (Lambiase & English, 2021). At several points Goldman Sachs emphasizes their commitment to stakeholders and the strength of that relationship prior to the 2008 crisis. When discussing the survival of past crises the authors offer that, “… our franchise and culture emerged stronger, primarily because we never lost sight of the importance of developing and maintain strong client relationships” (p. 1). Furthermore, a continued focus on client needs and expectations is described as integral to surviving the current crisis. They say, “a focus on our clients will continue to be the strongest catalyst of our long-term success” and “our core competencies will remain in the services…we have long provided to our … client base” (p. 2). Toward the end of the letter, the authors note that their top employees were those that maintained “a rigorous client focus” (p. 3).